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By Alan Draper | Nov 2023

Ladies and Gentlemen, I give you the Leasehold system

Following the announcement of the Leasehold reform Bill in the Kings Speech, Alan Draper of Common Ground Estate & Property Management attended a meeting of the APPG for Commonhold and Leasehold reform where Housing minister Rachel Maclean outlined the Governments proposals.

A summary of those proposals can be viewed in our Levelling the playing field in the heavily rigged leasehold system article, however, this article is not about the outline bill but focuses on a remarkable speech by Liam Spender, a solicitor, trustee of the LKP and leaseholder.

His speech focused on his efforts to challenge the managing agent and freeholder of the development where he is a leaseholder.

It started with his experience attending an FTT hearing where, upon entry, there was a dedicated fast-lane for freeholders’ lawyers to enter with all other parties undergoing searches etc……….this opening experience is symbolic of the disdain that the law and FTT regards leaseholders.

Mr Spender then proceeded to argue successfully that the leaseholders were due monies back for unreasonable service charges 2018-20.  This included around £480,000 for a rented intercom system,  Following the hearing, the freeholder was given a two week extension to gather more evidence but took a month to declare that they had none.

Incredibly, the freeholder then appealed the judgement….why? Because it is a further opportunity to make money at the leaseholder’s expense.

There was also a separate dispute later in the year regarding an electricity subsidy that the freeholder had claimed but NOT shared with leaseholders.

In July this year, the service charge budget included provision for £54,000 in legal bills accrued by the freeholder in fighting the case against Mr Spender and the leaseholders.

In every other form of litigation, the winning party has the chance to recover costs.

In the leasehold system, the Landlord can recover costs regardless of the outcome.

Whilst the reforms include measures to tackle the assumption of legal costs being recoverable by the freeholder, it is more than 50 years since the first leasehold reform legislation was granted Royal ascent. Every other attempt at leasehold reform since has always been at the cost of the leaseholders trying to enact it.

Leasehold is a corrupt system that simply needs to be dispensed with. I am exasperated that England and Wales are the only countries in the world where a commonhold system isn’t in place (in a meaningful way) and this feudal enterprise continues.

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